Falcon Australia holds a 100% interest in Exploration Permits EP 99, 98, 117, and 76, covering approximately seven million acres in the Beetaloo Basin. The Beetaloo Basin is a Proterozoic and Cambrian age tight oil and gas basin that the Board believes is well suited for unconventional oil and gas projects. Connected to the major industrial and export markets in Darwin 600km to the north, Falcon Australia is uniquely positioned in the Northern Territory to achieve commercial production. Existing infrastructure includes a major highway, two gas pipelines and a railway.

Since acquiring the licences in 2008, Falcon Australia has conducted extensive study of 11 wells that were drilled by an oil and gas subsidiary of Rio Tinto between 1988 and 1992. Oil and gas bleeds from 6,700 meters of core and other well data confirm all necessary elements of productive shale oil and shale gas play exist in multiple independent petroleum systems. Each of these intervals is prospective for oil or gas providing Falcon with an extensive inventory of drilling opportunities.
In July 2011, Falcon Australia entered into a participation agreement with Hess which required Hess to acquire a minimum of US$40 million of seismic data across the majority of three permit areas. By December 2012 Hess had collected 3,490 kms of seismic data and spent in excess of US$60 million.
Under the terms of the Participation Agreement, Hess had until 30th of June 2013 to commit to a five well drilling programme in order to earn a 62.5% interest in the three permits. A late request by Hess to defer the election date was unanimously rejected by Falcon's board, therefore Hess didn't elect and forteits their rights to earn 62.5% in three of the Beetaloo permits.

Activity

RPS Report January 2013

RPS Energy, in its independent CPR dated 1 January 2013 estimates gross unrisked recoverable prospective resource (play level) potential of 162 Tcf of gas and 21,345 Mmbo of oil (P50) for Falcon Australia’s Beetaloo Exploration Permits. In its entirety, the Beetaloo Basin covers approximately 8.7 million acres (approximately 35,260 km2) and, as far as the Company is aware, a total of 11 wells have been drilled in the Beetaloo Basin to date. This work was undertaken by a Rio Tinto Group subsidiary company exploring for conventional hydrocarbons and while not leading to a commercial development, the data from the cores demonstrated the presence of tight oil and gas and several horizons were shown to be prospective for unconventional oil and gas.

Falcon/Hess Joint Venture

In April 2011, Falcon Australia entered into a joint venture with Hess, whereby Hess agreed to collect seismic data over an area covering EP76, EP98, EP99, excluding an area covering 100,000 acres (approximately 405 km2) surrounding the Shenandoah-1 well-bore. Since the date of this agreement, Hess has spent in excess of US$60 million acquiring 3,490 kilometres of 2D seismic data which is currently being interpreted. Hess had the option until 30 June 2013, to acquire a 62.5 per cent working interest in the Hess Area of Interest by committing to drill and evaluate five exploration wells at Hess’ sole cost, one of which must be a horizontal well. A late request by Hess to defer the election datewas unanimously rejected by Falcon's board, therefore Hess didn't elect and forteits their rights to earn 62.5% in three of the Beetaloo permits.

Shenandoah-1

The Shenandoah-1 was a vertical hole well drilled by Sweetpea in 2007. The well was deepened by Falcon Australia in 2009 to finish at 2,714 metres. It was re-entered in Q3 2011 and five short tests were conducted including several fraccing operations. Gas was recovered from three zones with some liquid

Mr. Akhmerov has been a member of the Board since December 2010. He was also on the Board from September 2007 until May 2008. Mr. Ahkmerov graduated from the Moscow Institute Of Management (1989), Wharton Business School (1995), and Lauder Institute of Business and International Relations (1995). From 1989 through 1993 he worked at the Moscow office of Bain & Company, specialized in privatization and banking. After graduation from Wharton Business School he worked for the Boston office of Bain & Company. In 1998 he returned to Russia and joined Sputnik Group, the largest Russian private equity investment group, as a partner. In 2001 he moved to TNK as First Vice President for Planning, Budgeting, Investment Governance, Taxes, and Reporting. From 2004 until 2006 he served as Chief Financial Officer of Renova Group. He has served as Chief Executive Officer of Avelar Energy Group since 2007.

The Inquiry Chair, Justice Rachel Pepper noted the following in Community Update #26:

The work of the Inquiry is to identify and assess the environmental, social, cultural and economic risks associated with hydraulic fracturing for any onshore shale gas.

It is not the role of the Inquiry to make a recommendation whether or not the moratorium on hydraulic fracturing in the Northern Territory should be lifted, that is a matter for Government.

The overall conclusion is that risk is inherent for an onshore shale gas industry. However, if the recommendations made in the Report are adopted and implemented in full, those risks may be mitigated or reduced - and in many cases eliminated altogether - to acceptable levels having regard to the totality of the evidence.

Summary of draft Final Report

The summary of the draft Final Report provided the following conclusion:

"No industry is completely without risk. And the development of any onshore shale gas industry in the NT [Northern Territory] is no exception. But having considered the most current available scientific literature and data from a wide range of sources, and noting the recent and continuing technological improvements in the extraction of onshore shale gas, the conclusion of this Inquiry is that the challenges and risks associated with any onshore shale gas industry in the NT are manageable by, among other things:

releasing land that is environmentally, socially and culturally appropriate for use for shale gas development;

the completion of a SREBA [strategic regional environmental and baseline assessment] to gather essential baseline data prior to any onshore shale gas industry being developed;

implementing an area or regional-based approval system;

mandating world leading engineering standards for the construction, maintenance and de-commissioning of all onshore shale gas wells and for the extraction of shale gas by hydraulic fracturing;

implementing new technologies where relevant as soon as they become available;

requiring the comprehensive monitoring and reporting of all aspects of onshore shale gas operations with real-time public scrutiny of the resulting data;

ensuring that the regulator is independent insofar as the agency that is responsible for promoting any onshore shale gas resource is not the same agency responsible for its regulation;

reforming the current regulatory framework governing onshore shale gas development in the NT to strengthen transparency and accountability of all decision-making and to ensure a stringent system of compliance and enforcement; and

introducing full fee recovery to fund the necessary regulatory reforms and to ensure that strong oversight is maintained.

Of course, nothing is guaranteed. And with any new industry it is not uncommon for problems toemerge. However, it is the Panel's opinion that, provided that the recommendations made in thisReport are adopted and implemented, not only should the risk of any harm be minimised to anacceptable level, in some instances, it can be avoided altogether."

THE TERRITORY Government will today lift its moratorium on hydraulic fracturing of onshore gas.

Chief Minister Michael Gunner will announce the decision this morning, ending an 18-month stand-off over the controversial practice.

Mr Gunner’s office refused to comment last night, but it’s understood Cabinet signed off on the final details of its response yesterday, following an independent scientific inquiry into the practice, better known as fracking.

That inquiry, headed by Justice Rachel Pepper, found the risks associated with fracking could be mitigated, if not eliminated, if the proper recommendations are put in place.

It’s understood the Government will implement most, if not all, of the 135 recommendations from Justice Pepper’s final report.

Environmentalists and some pastoralists have run a strong campaign opposing fracking. They disagree with Justice Pepper’s assessment that the risks can be effectively mitigated, and have argued fracking could pollute local rivers and bores.

Left-wing think tank The Australia Institute has also argued the increase in greenhouse gases from fracking would be unacceptable, and that opening up new sources of fossil fuels like shale gas is “completely incompatible with Australia’s commitments under the Paris Agreement”.

But the business community and mining companies say the Government cannot ignore the industry’s potential economic benefits now Justice Pepper’s report has found the risks can be mitigated or eliminated.

MMC Australia general manager Owen Pike, who has led the pro-fracking campaign, said the decision to lift the moratorium would not immediately inject cash into the economy.

But he said it would give confidence that the economy would recover and that the flat jobs market would turn around.

Pro-Fracking Business Forum, Owen Pike Pic katrina Bridgeford.

“Given the level of public consultation and fight from local business to get this industry here, a yes decision allows local business to honourably demand opportunities for the foreseeable future,” he said.

Last week Jemena, the company building the Northern Gas Pipeline between Tennant Creek and Mt Isa, said it would begin work on a $4 billion expansion of the project as soon as next year if the moratorium is lifted, provided the restrictions put in place still allow gas reserves in the Beetaloo Basin to be developed quickly.

That could be a major hiccup though, as one of Justice Pepper’s recommendations is that exploration only be allowed to recommence once the regulations are in place.

Today’s announcement will also provide a major boost for Mr Gunner’s leadership.

Mr Gunner and his chief-of-staff Alf Leonardi stared down member’s of Labor’s left faction and powerful unions at the ALP’s 2016 conference to prevent a permanent fracking ban being put in place.

A compromise deal saw Mr Gunner agree to a moratorium while Justice Pepper’s inquiry was conducted.

The Chief Minister has since held firm despite major pressure from powerful unions, particularly the now-merged CFMEU and MUA.

Mr Gunner has consistently argued his Government would be guided by Justice Pepper’s report in deciding if fracking should be banned, or allowed under highly-regulated circumstances in tightly-prescribed areas.

Those tightly prescribed areas are expected to be announced today.

Today’s decision should also give the Government impetus to argue it should receive more funding from the Commonwealth.

Federal Treasurer Scott Morrison told the NT News last year the Federal Government was questioning whether the Territory’s GST should be lowered in light of the fracking ban. But Mr Turnbull last week announced $5 billion for an airport rail link in Victoria, a state that has banned onshore gas fracking

It is a luxurious alpine retreat in the Swiss mountains. A man standing at the window looking at the mountain peaks in the distance.

Another man, older, sits in a Wingback leather chair.The two men, both billionaires, are friends. The older man is the founder of Falcon Oil and Gas. The man at the window is Falcon’s largest shareholder.

“With these long-term investors. No matter what we’re throwing at them, they just aren’t selling. ”

“Well Victor, we did everything within our power, like creating the AIM Listing for the sole purpose of shepherding Falcon’s stock price in Toronto. But that doesn’t work. You can’t move a battleship with a fishing boat. Our friends the market agents can’t get the job done either. Churning is a zero sum game. I think those long-term investor are determined to hold, and you better get used to it. Besides, you just picked up 38 million shares for 0.207 cents and I believe that was a steal. “

“Yeah I know Mark. Except I can’t get used to the idea rubbing shoulders with 13,000 new millionaires. “

South Africa to Back Shale Exploration May 17, 2018 President Cyril Ramaphosa’s government is breathing new light into the country’s shale gas exploration programme. Two key ministers this week voiced the importance of the gas economy, including shale gas, to the country’s future development. Mining Minister Gwede Mantashe told MPs that “the southern Main Karoo Basin is considered the most prospective area for shale gas, with a possible estimation of 205 trillion ft3 of gas technically recoverable, as reported by the Petroleum Agency SA. The successful development of this resource has the potential to transform the national energy economy of South Africa. To that end, we intend to move with speed to fast-track the finalisation of Exploration Rights applications so that South Africa can maximise its chances of reaping the benefits from shale gas exploration and exploitation.” “In due course” he will publish a notice inviting comments from persons who may be materially and adversely affected by the government's decision on three pending shale gas applications. Although he did not name the applicants, his department later said they are Shell, Falcon Oil and Gas, and Bundu Gas and Oil Exploration. The three had been expecting to receive licences already two years ago. However environmental groups have actively opposed any shale gas development in the Karoo. Energy minister Jeff Radebe however has pledged that the government “will be proceeding” with shale. In a separate session, he told MPs in a wide-ranging statement on energy policy reported by NGW May 16 that shale gas discoveries in the Karoo will be "a game changer for the South African economy and energy mix."